Holden's local engine factory could be closed by 2020. Photo: Craig Abraham

Holden's $400 million Port Melbourne engine plant could shut by the end of the decade.

A push for fuel efficiency and the high Australian dollar have cast a cloud over the future of the plant that exports more than 50,000 engines annually and supplies the locally-produced Commodore.

Holden chairman and managing director Mike Devereux admits that while no decision had been made, the V6 engine plant could shut by the end of the decade.

"We would definitely be talking to both the Victorian Government and the Federal Government - and have been - about the future of the engine plant," said Devereux. "We have decisions to make."

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Devereux said a big investment is required to reconfigure the plant for more fuel efficient four-cylinder engines.

"You would need to retool that engine plant almost fully to be able to build something other than that V6," he said. "A significant amount of capital investment would be required to upgrade that engine plant."

It was only a decade ago that Holden opened the new plant and began exporting to brands as diverse as Alfa Romeo and Saab.

The same engine family is produced in Ontario, Canada.

Any move to shut the plant could threaten up to 400 jobs, adding pressure to an already distressed local manufacturing industry that has seen thousands of jobs lost as Holden, Ford and Toyota trim their local operations and respond to waning large car demand and cheaper imports. Holden is currently crunching the numbers on the plant, which is building V6 engines that are becoming increasingly less relevant as car makers down size and switch to four-cylinder propulsion.

Holden recently committed to spending more than $1 billion in return for $275 million in taxpayer funding to guarantee local vehicle production until at least 2022.

However Devereux says the guarantees relating to local investment do not relate to the engine plant.

"The vehicle building and the engine plant are completely disconnected from the decision on architecture (future models to be produced)," he said. "The engine plant is not part of the contract we signed (with the Federal Government)." Devereux indicated Holden would be expecting additional taxpayer funding for the engine plant to continue long term. "We'll need to have a business plan for that plant."

However, he said the plant will operate until at least 2017, when production of the soon-to-be-updated VF Commodore is expected to end.

"We have a very full production plan for the life of that engine we are going to be building a lot of those V6s, said Devereux. "We have some time to think about it."

93 comments so far

Despite all the hype when the engine was released, it's an average V6 at best. Does not even get close to matching world's best engines, even though they were talking it up. Ford's ancient 6 is far superior.

Commenter

daffy

Location

Date and time

January 15, 2013, 8:49AM

Ancient they may be but they do the job. I dont/cant recall if there were ever any major reliability problems. Note that I said "major". Sure, there have been a few minor hiccups with some unlucky customers but on the whole, those ancient engines are just fine and dandy.

Commenter

Peter

Location

Melbourne

Date and time

January 15, 2013, 10:29AM

@Peter. Saw a model T ford on the weekend chugging along quite respectably. A fine and dandy engine that has stood the test of time. Why did we abandon it?

Commenter

PeterG

Location

Date and time

January 15, 2013, 12:08PM

How is Ford six superior? Is it lighter? No. Is it more fuel efficient? No. Can it be produced in several configurations for front and rear wheel drive? No. I'd take the Holden built 2.8 turbo over a Falcon six any day. It is the reason that Commodore is grgeous and has perfect 50:50 weight distrbution while the Falcoin is a nose heavy pig by comparison, thanks to its engine.

Commenter

MotorMouth

Location

Sydney

Date and time

January 15, 2013, 12:09PM

The Falcon six puts out less power and torque and uses more fuel. How is it superior ?

Commenter

john

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Date and time

January 15, 2013, 12:17PM

The I6 has great torque and cylinder balance. That's all. I'd rather the 3.2 V6 made by Holden that was fitted in the Vectra, and the turbo versions MotorMouth mentioned...

Commenter

Problem?

Location

Date and time

January 15, 2013, 12:51PM

Oh oh oh I forgot about the I6T! Now THAT is an awesome engine....

Commenter

Problem?

Location

Date and time

January 15, 2013, 1:56PM

And they will expect and be given even more handout's. Then they will show results that they are running at a loss for a few years and then show record profits. Then the cycle starts again. There is no way we should be propping the auto industry up again! If it is unsustainable, let it die.

Commenter

Riddick

Location

Date and time

January 15, 2013, 8:53AM

I feel the same about the childcare industry, taxis and our motorways. If they can't survive a little competition, let them die.

Commenter

Trogdor

Location

Date and time

January 15, 2013, 9:30AM

So what Trogdor is saying is that we should kill off motorways, taxis and childcare centres. I strongly suspect that nobody else has had the foresight to come up with this idea.